George Alexander Muthoot, Managing Director of Muthoot Finance, on Friday, November 10, indicated that the borrowing cost for the company has nearly bottomed out. He suggested a potential increase of 10-15 basis points in the near future. Muthoot emphasised that the slight uptick in the last quarter, about 10 basis points, did not significantly impact the company's yields.
"Despite the rise, Muthoot Finance maintained its customer-friendly approach by refraining from increasing yields, resulting in a marginal decline of 15-20 basis points in net interest margin (NIM)," he told CNBC-TV18.
Commenting further on September quarter, he said that it was reasonably well, but several loans became non-performing assets (NPAs).
However, the shares of the company fell 7.4 percent in trade on Friday, November 10 as the gold financing firm' net profit were below analysts' estimates. At the time of writing this report, shares of the company were trading at ₹1,271.4 on the NSE, lower by 3.19%.
On Thursday, the company reported 14.3% year-on-year (YoY) rise in net profit at ₹991 crore for the second quarter that ended September 30, 2023. In the corresponding quarter last year, Muthoot Finance posted a net profit of ₹867.2 crore. The CNBC-TV18 poll had predicted a profit of ₹1,043.2 crore for the quarter under review.
The company achieved its highest growth in the first half of FY24 in both loan and gold assets. The loan assets grew 21% year-on-year (YoY) or ₹11,771 crore while the lender's gold loan assets increased by ₹11,016 crore or 20% over the year-ago period.
The company opened 331 new branches during the first half of FY24, reinforcing its market presence. Additionally, Muthoot Finance successfully raised ₹700 crore through the 32nd Public Issue of Secured Redeemable Non-Convertible Debentures (NCDs), which was oversubscribed on the first day.
(Edited by : Anshul)
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